Morrisons profits soar amid record sales

Morrisons today hailed "another good year" as profits climbed 21 per cent and sales hit record levels.

The UK's fourth biggest supermarket chain reported pre-tax profits of £767 million for the 12 months to January 31, from £636 million in the previous year.

Morrisons, which said it expects economic conditions to remain challenging this year, saw like-for-like sales growth slow across the period to 6 per cent, compared with 8.2 per cent the year before.

The Bradford-based grocer saw turnover rise 6 per cent to £15.4 billion.

It is engaged in a growth strategy put in place by former boss Marc Bolland, who has left to join Marks & Spencer.

Morrisons opened 43 new outlets in the year, taking its total to 425, and it plans to keep expanding its store base to reach more customers.

Last year presented a challenge for UK supermarkets as the recession squeezed consumers' wallets.

Morrisons said it put in place 30,000 price cuts during the year and "delivered a promotional programme that enabled our customers to save money whilst eating good fresh food".

Sales of its own label value range rose 34 per cent in the year, while sales of premium organic and fairtrade products declined.

Christmas trading saw a surge for the firm as it outperformed the market for the fourth year in a row during the festive season, putting larger rivals in the shade.

Morrisons chairman Sir Ian Gibson welcomed the firm's new chief executive Dalton Philips, who takes up his post later this month.

Mr Philips is a relative unknown in UK retail but has plenty of grocery experience as a former executive of US giant Wal-Mart and chief operating officer of Canadian food group Loblaw.

Sir Ian said the supermarket would continue with its long-term strategy of investing in growth, with new selling space and manufacturing capability in the year ahead.

"We expect the economic environment to remain challenging, disposable incomes to be under pressure and value to remain a high priority for consumers," he said.

"The board believes that Morrisons' unique offer of high quality, fresh food at great value prices will continue to attract customers from our competitors and drive market share growth in the year ahead."

The firm said that based on research from Kantar it believes it has grown its share of the market to 12.6 per cent from 12.3 per cent.

Nick Bubb, of Arden Partners, said the results comfortably beat analyst expectations and were "pretty impressive".

Growth exceeded rival Sainsbury's as like-for-like growth was driven through promotions without sacrificing margins.

Meanwhile, food price inflation also buoyed the industry for much of the year.

Mr Bubb said the new chief executive is inheriting a business in good shape, with growth potential in online and overseas markets.

"It's an ideal place to be coming in at because you have fantastic momentum and lots more to do in the long term," he said.